What is the name of your state?What is the name of your state? Arkansas
2 years ago I sold my 50% stake in a partnership business to the other partner. Since then, he as remained the owner and is still currently running the business.
The sale of the business consisted of a contract that detailed payment terms, non compete clause, etc. The payment terms are outlined as $XX,000 per month for 6 years, which is when the full payment is finally made.
($XXX,XXX divided by 72 months---Interest free). He also made a small down payment of about $45,000 to me which was calculated into the monthly payments.
Essentially, I am a allowing him to make payments to me as apposed to him borrowing the money from a bank.
Since the sale of the business, I have NO (ZERO) ties to it other than receiving the payment checks each month. Each year the owner gives me a 1099-Misc for the amount paid for that year from the sale of the business.
My question is, is this the correct method? Or should we be doing this in a different manner? Am I shorting myself somehow?
If this is correct, am I entitled to any deductions on my personal tax return?
Thanks in advance!
2 years ago I sold my 50% stake in a partnership business to the other partner. Since then, he as remained the owner and is still currently running the business.
The sale of the business consisted of a contract that detailed payment terms, non compete clause, etc. The payment terms are outlined as $XX,000 per month for 6 years, which is when the full payment is finally made.
($XXX,XXX divided by 72 months---Interest free). He also made a small down payment of about $45,000 to me which was calculated into the monthly payments.
Essentially, I am a allowing him to make payments to me as apposed to him borrowing the money from a bank.
Since the sale of the business, I have NO (ZERO) ties to it other than receiving the payment checks each month. Each year the owner gives me a 1099-Misc for the amount paid for that year from the sale of the business.
My question is, is this the correct method? Or should we be doing this in a different manner? Am I shorting myself somehow?
If this is correct, am I entitled to any deductions on my personal tax return?
Thanks in advance!
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